Procedures for Giving Stocks and Securities

Procedures for Giving Stocks and Securities

Charitable contributions may be received by parishes in many different forms. Cash, real estate, and securities are but a few of the forms that charitable donations may now take.

Following is a policy for the receipt of gifts in the form of negotiable securities, stocks, bonds, mutual funds or equities.

In the event of a potential donation of securities, the Diocese of Oakland has established a special account with Charles Schwab to liquidate such gifts on behalf of the designated recipient and a procedure to associate the gift with the donor - a very important part of the transaction. All gifts of securities to a parish or school are to be made through the Diocese and, ultimately, through this account. The reason for this is that the Roman Catholic Bishop of Oakland, a Corporation Sole is the legal owner (taxable entity) of all property in the Diocese and, likewise, of any donated funds that might be received. It is, therefore, the Diocese of Oakland that must handle stock transfers on behalf of parishes. On receipt of the gift, Charles Schwab will be instructed to immediately sell those securities and forward the proceeds to the designated recipient through the Diocesan Finance Department. Procedure:

1. Donor's should be instructed to use the Stocks and Securities Donation Form to send instructions to their broker for all stock transfers. It contains all of the information a broker requires to complete the transaction.

2. The precise dollar value of a stock gift cannot be determined until the securities are received and sold by the Diocese (the donor, however, assumes a value equal to the market on the date of transfer - See IRS Publication 526 for further details - exerts of which are attached as Addendum I) Therefore, if the donor elects to allocate dollar amounts to various end uses, the donor will need to designate one of those amounts to be the remainder account by circling it on his letter. The circled account will receive the balance left after other designated amounts have been allocated. Or, the donor may designate percentages of his gift to each end use. When multiple entities (i.e. more than parish, school or charitable organization) are involved, the allocation of funds will be handled at the Diocesan level per the instruction of the donor.

3. In addition to providing a copy of the attached to the Donor's Broker, copies of the attached form should be sent by fax to (1) the Executive Director for the Office for Mission Advancement (to alert him to the pending receipt of a stock gift for the benefit of a particular parish, (2) the Diocesan Controller, to alert her to the pending receipt of gift stocks in the Charles Schwab account, and (3) to the pastor or business manager of the designated recipient/parish so when funds arrive from the Diocese of Oakland proper allocation of the funds (e.g. to Diocesan Savings) will be expedited.

4. The names & fax numbers of the Executive Director for the Office for Mission Advancement and Diocesan Controller responsible for seeing to it these transactions are handled properly follow:

5. It may take several days after the donor has instructed his broker, before the securities are transferred to Charles Schwab. It takes yet another three to four working days for the trade to settle, when the proceeds of the sale actually arrive in the Diocesan account. If there are no unusual circumstances and everything is in order, the securities are generally sold on the day of receipt or the next working day, at the "current" market price (not necessarily the market value on the date that transfer instructions were initiated by the donor).

6. Once the pastor or business manager at the parish receives the check from the Diocese of Oakland finance department, the money may then be deposited into Diocesan Savings or allotted directly to the use designated by the donor.

7. The parish pastor or parochial administrator or business manager must (in order for the donor to receive the charitable deduction) then acknowledge receipt of the donation - with the understanding that value is established by the donor on the date notification is given to the broker to transfer securities to the parish or diocese, not the date of settlement. In other words, it is not the role of the recipient of donated securities to verify their value to the donor but simply to acknowledge receipt of "X" shares of "XYZ" company for purposes of "XXX" on the date of settlement.